Shares of American Eagle Outfitters jumped 34% on Thursday after the company reported that its recent ad campaign featuring Sydney Sweeney attracted a wave of new customers. The campaign, launched this summer, sparked discussions about race and beauty standards, drawing both positive and negative reactions.
Critics pointed out the use of “genes” in place of “jeans” in some ads featuring the popular actress from “Euphoria” and “White Lotus.” Despite the backlash, CEO Jay Schottenstein stated that the campaign effectively boosted brand awareness across various demographics. He added that the influx of traffic during the second quarter persisted into August.
Looking ahead, American Eagle expects modest growth in comparable-store sales for the next quarters, after previously withdrawing its yearly forecasts due to market volatility. The company now anticipates that same-store sales will be flat for the year.
In addition to Sweeney, a new ad featuring NFL star Travis Kelce has also strived to elevate the brand’s visibility. Responding to criticism, American Eagle maintained that the campaign focused on their clothing, not racial themes.
The Gap recently launched its own advertising effort with girl group KATSEYE. Gap’s CEO Richard Dickson highlighted the success of their “Better in Denim” campaign, which garnered a whopping 400 million views shortly after its release.
Neil Saunders, managing director at GlobalData, weighed in on the situation. He described the Sweeney campaign’s uproar as a “tempest in a teacup,” indicating that while it stirred controversy, it didn’t noticeably hurt sales. Instead, it helped American Eagle regain attention in a competitive market.
Interestingly, American Eagle’s revenue dipped 1% to $1.28 billion in the last quarter, but the company remains optimistic about the future. CMO Craig Brommers confirmed that the collaboration with Sweeney will continue into the second half of the year, promising to introduce new campaign elements.
These shifts in branding highlight how retailers are navigating the current market landscape, where effective marketing can spark conversation and engagement, even amid criticism.
For more insights, a recent report from Statista shows that 78% of consumers value companies that are socially responsible, emphasizing the importance of how brands connect with their audience.
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Richard Dickson, Sydney Sweeney, Travis Kelce, Jay Schottenstein, Marketing and advertising, PA State Wire, Pennsylvania, Flowers, Business, Craig Brommers, Entertainment, American Eagle Outfitters, Inc., The Goldman Sachs Group, Inc., Neil Saunders, Teens
